Online presence is not enough; boards should stay updated about social media strategies and how best to use them.
Each minute there are over 4.1 million likes on Facebook, 347k tweets being posted on Twitter, 300 hours on new video being uploaded on YouTube. So, it’s important that Boards appreciate the role social media plays. Twitter was launched in 2006, YouTube in 2005 and Facebook the oldest among these three in 2004. Given that average age on the Indian Board is just over 59, this can be difficult bridge to cross. But ‘socialize’ themselves, they must.
Let me take a recent example. Kiran Mazumdar Shaw tweeted, disparaging an equity report that had put a sell call on her company. This immediately drew fire from other analysts and investors, who quickly lined up behind one or the other. On Twitter you could then read what each of them said, what others thought about what each one said. And it does not stop at this: you can view what others are saying about what was said on what was originally said. This then was then picked up by the print media - which is why you are reading about this exchange. Communication is suddenly no longer one sided with companies telling the world about how they will change it, but receiving instant feedback about why they just cannot, since the company employ’s … I’d rather not repeat this here.
The exchange described above was rather harmless, but it is not difficult to imagine a situation where the situation quickly gets ugly – because just about anyone can thrust themselves onto a public conversation, and that may even require the Board to step in.
It’s wrong for Boards to assume social media is only about an individual being connected to their friends or family: technology has blurred the distance between work and home. Nor must they assume that social media is only for retail customer-facing companies or customer service.
Today it extends to recruitment and human resources, investor relations, CSR, corporate reputation, B2B…pretty much everything. It is important that Boards to find time to discuss social media initiatives, understand its potential and its risks for their company. The risk of assuming that social media is ‘not for our company’ is that when company’s need to deal with social media, they are ill prepared to do so. This holds true not just for listed companies, but all. Unlisted, not-for-profits, large, small, educational institutions, PSU’s,…. It’s for everyone.
I am not for a moment saying companies are not on social media. They overwhelmingly are. The question is, how much about this do the Board members really know or understand?
Happily there is now a playbook for Boards to follow.
One, ask whether the company has a social media strategy. This includes knowing the social media platforms the company is occupying, who maintains these accounts, who has the passwords – and are they secure. Ask if the company has a Facebook page and if the company own a Twitter handle. This also includes knowing if your company is ready to use social media as a tool for transparency and information dissemination. And, also if there is a budget for the social media strategy.
As a part of this, the Boards should keep themselves updated by ‘Googleing’ (Google, founded 1998) the company’s name, what information, news and images show up. And what pops up when you key in the names of the key management personnel?
Two ensure that your companies know if their employees are present on social media in the company’s name or their own name. Example Power Grid Corporation does not have its own Twitter handle – but a number of its employee’s tweet using their @<name>_PGCIL. It will be a good idea for companies to initiate some training on do’s and don’ts so that these boundaries are not breached.
Three, how does the company manage social media data analytics? Who undertakes this analysis, how often is it done, what do the results show and what is the company’s action plan around key findings of the data analytics?
And finally the Board should think about crisis planning. The immediacy and the speed with which information and opinions are disseminated through social media, having a quick and forceful response will prevent damaging the company’s reputation. Ensure a point-person is identified for proactive damage control.
While Boards should ask these questions, individual directors too need to keep current. My advice - if you are under 60, been to an engineering college and are on a Board, remember change is closer than it appears. And if you are over 60, have held a government job and on a Board, remember, if over two billion addicts use social media, so can you.
A modified version of this article written by Amit Tandon appeared in today’s Business Standard. View article Why India Inc’s boards can’t ignore social media